VCES – Voluntary Compliance Encouragement Scheme,2013
The Honorable Finance Minister has introduced Service Tax Voluntary Compliance Scheme in his budget speech for the year 2013. This scheme is aimed to recover service tax dues based on self declaration by assessees of any service tax not declared for the period 01.10.2007 to 31.12.2012 and not paid till 31st March, 2013.
This scheme will benefit both assessee as well as the government. The assessee will be benefited by paying not declared service tax without interest and penalty and the government would benefit by generating more revenue in the time when it is in need of the same. We provide below the details of the whole scheme, its features, eligibility, requirements etc.
Benefits & Features of VCES
No Future Legal Proceedings
Once the certificate is issued by the Designated Assessing officer it would be conclusive and no matter shall be reopened thereafter in any proceeding before any authority or court.
Any person who is liable to pay tax for the period 01.10.2007 to 31.12.2012 but has not paid the same till 01.03.2012.
Who is not Eligible
If the person has filed the return disclosing his true liability but not paid service tax dues as per the return, then he is not eligible to avail benefit under this scheme for the period of the return.
Assessee in receipt of show cause notice /order of determination u/s 72,73 or73A of Finance Act.
The assessee is also not allowed to declare tax dues in respect of any issue which is covered in any notice or order of determination issued before 1st March, 2013
if any enquiry or investigation in respect of service tax not levied or not paid or short levied or shot paid has been initiated and pending as on 1st March,2013 by way of:
Issuance of summons u/s 14 of CE Act
When production of accounts, documents or other evidence is required by the department
Initiation of audit
In these cases the power if with the designated officer to reject the declaration by issuing an order after recording the reasons in writing.
Procedure for Availing VCES
If the declarant is not registered for paying taxes, then he is required to get himself registered and then apply for the scheme.
Then the declarant shall make a declaration in form VCES-1 to the designated authority on or before 31.12.2013.
On receipt of VCES-1, the designated authority will issue acknowledgement of declaration in Form VCES-2 within 7 working days from the date of receipt of declaration.
Declarant is required to pay at least 50% of tax dues on or before 31.12.2013. Pay balance on or before 30.6.2014 and if not paid, can also be paid on or before 31.12.2014 along with interest from 1.07.2014.
On full payment of taxes, the designated authority will issue acknowledgement of discharge in VCES-3 within 7 working days from the date of furnishing of details of tax dues paid in full, along with interest if any.
CENVAT credit cannot be utilized for the payment made under this scheme
Amount paid under this scheme shall not be refundable in any case